Ethereum has lost ground below $2,300 as the market cools after weeks of cautious recovery. Price is retreating — but a CryptoQuant report tracking Binance’s derivatives activity has identified dynamics below the surface that complicate the bearish reading considerably.
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The data shows that derivatives traders on Binance have been aggressively betting against Ethereum during the recent recovery — and are still adding to those positions even as the price pulls back. Cumulative net user count fell to approximately -$585 million, its biggest negative result since March 27, when the metric reached around -$340 million. In the weeks between those two readings, the short-selling pressure didn’t just last—it intensified.
This intensification coincides with rising open interest on Binance, which rose from roughly $2.46 billion to $2.9 billion during the first week of May. Rising open interest with deeply negative taker volume describes a specific market structure: traders are not only reducing long positions. They are actively building new short exposure in a recovering market.
The significance of this setting is counterintuitive. Very short positioning during the recovery does not directly confirm the bear case. This creates the conditions for the opposite — a market structure where short players themselves become the fuel for growth if Ethereum proves capable of absorbing the selling pressure they create.
Short traders pay to bet against Ethereum. The market does not give them what they need
CryptoQuant report draws a distinction that makes the current setup structurally significant. Selling pressure of -$585 million was significantly stronger than the -$340 million reading from March 27, the previous comparable bearish reference. Selling is not just persistence. It deepens. And yet open interest on Binance rose from $2.46 billion to $2.9 billion at the same time, confirming that the negative flow of buyers reflects new short positions being actively built, rather than existing long positions being closed out.
This combination creates a specific fragility. When traders aggressively build short exposure and the price fails to fall in response, the short offers are not validated – they become trapped. Each session in which Ethereum absorbs selling pressure without falling increases the final cost of withdrawing those positions.
The CVD reading adds stabilizing context. Cumulative volume delta maintained around $4.4 billion during this period. It suggests that underlying spot demand has not fallen despite pressure from derivatives.
The picture of the funding rate completes the argument. Ethereum funding on Binance has remained negative since early February — months of persistent bearish belief that has now deepened below levels seen around April 7, 2025. Traders are paying to remain short the asset, which continues to refuse to deliver on the declines they are positioning for.
The conclusion of the report is precise and fair. A group is suspected. Doubt is expressed through real capital directed at short positions. And if Ethereum continues to absorb that pressure instead of breaking under it, doubt itself becomes the mechanism for the next step higher.
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Ethereum is consolidating below resistance as the structure tightens
Ethereum is trading around $2,280 on the daily chart, consolidating just below the $2,300-$2,400 resistance range that capped any attempt to recover from February’s decline. Price action shows a clear transition from impulsive selling to controlled compression, with higher lows steadily forming from the March lows near $1,800.
The rally has reclaimed the 50-day moving average and is now interacting with the 100-day moving average, both of which are flattening after the decline. This flattening reflects a loss of momentum on the downside, not a confirmed bullish expansion. Meanwhile, the 200-day moving average remains above the price and continues to decline, strengthening the overhead resistance structure.
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The volume has decreased compared to the capitulation phase in February. It shows that the current range is driven more by positioning adjustments than by aggressive participation. This is consistent with the market waiting for a catalyst rather than committing to a direction.
Structurally, Ethereum is compressing into an increasing range. A decisive break above $2,400 would change the momentum and open a move to higher levels. Failure to break would likely extend the consolidation, with $2,100 to $2,150 as the first support zone, followed by stronger demand near $2,000.
Featured image from ChatGPT, chart from TradingView.com
